The 'Cloud' is a Commodity!

One can number the times in which there is a true intellectual moment of clarity giving that person an understanding of concepts and ideas. I was the recipient of one of those moments in 1999 when, as a member of the CME Group’s Board of Directors, I was lucky enough to have met and befriended the great Nobel laureate from the University of Chicago, Merton Miller. As we would sit for the monthly lunch which preceded the board meetings, Dr. Miller and I would engage in the ‘lively art of conversation’ about everything from the stock market to the politics of the hour. One day he said, completely out of the blue, “Jack my boy, I don’t understand this internet thing. Aside from information, can it do anything else for mankind?’ then he followed, “Then again what do I know, remember when the steam engine was invented it was done to pump water out of coal mines…No one ever thought it would be good for any other use!” I will forever remember that moment because of the sheer, pure wisdom which fell so freely from his lips.

What Dr. Miller was so very happy to explain to me was the chain of events which were derivative in nature but, nonetheless, a tremendously innovative dialectic. As he explained, the steam engine helped pave the way for the industrial age, one of the greatest achievements in the history of mankind. Harnessing electrical power created the next iteration of progress allowing for mass production and the electrical age. The logical progression of innovation leads to the digital age with compute resources taking innovation to unprecedented levels. Which takes us back to Dr. Miller’s question about the internet. The internet has its own innovative progression. After the internet of information which changed the landscape of investigations and research, (Remember Encyclopedia Britannica?), we witnessed the birth of the internet of services and things. Again, the landscape changed which involved everything from the purchasing of retail goods to making travel reservations. The final phase of the progress of the internet will be the transfer of value and ownership. This internet of value and ownership will soon be covered by fintech as the last missing piece in making the digital ecosystems complete. But as we observed the growth of the internet something strange happened, the innovation used to give us the internet, ‘the cloud’, became a commodity.

Let’s all understand what we are discussing. Cloud computing is the delivery of Computing Service over a network, usually the Internet, but sometimes internally using a private cloud. It is a type of computing that relies on sharing a pool of physical or virtual resources rather than deployment of local hardware and software. Companies offering these computing services are called cloud providers and typically charge for cloud computing services based on usage, like how you’re billed for gas or electricity at home. Sound familiar? The utility in question could be compute, as in the UCX model (www.UCXchange.com ), or it could be something else such as storage where you pay based on storage capacity used.

Many startups and small businesses will continue to migrate critical and non- critical workloads to the cloud. But established enterprises with legacy systems will find success in a slow but steady move from on-premises environments to a hybrid ecosystem which will consist of data, software, and infrastructure…The commodities of the digital age.

In a classic IaaS model (think of AWS, Microsoft Azure, Google etc.…)  compute is distributed on virtual machines that run on physical servers. The trouble with VMs is that there is waste, the baggage that each VM brings with it makes them very inefficient. Each VM runs a full copy of the operating system along with the various libraries required to host an application. The duplication leads to a lot of memory, bandwidth and storage being used up unnecessarily. Unfortunately, virtualization has now turned into a dinosaur where legacy applications go to die!

Containerization eliminates all the baggage of virtualization by getting rid of the hypervisor and its VMs, this is where UCX’s Bare Metal offering plays an important role.  Each application is deployed in its own container that runs on the ‘bare metal’ of the server plus a single, shared instance of the operating system. It has taken the stickiness out of using CSP’s and, more importantly, has made the end user agnostic to which CSP they use.

Containerization, as it’s used now, takes IT to a whole new level. The containers consist of only the resources they need to run the application they’re hosting, resulting in much more efficient use of the underlying resources.  The creation of containerization technology enhances the economic advantage of microservices-based applications. A technology understood by a small minority of insiders has now become available to the masses. It has made the cloud more of a commodity than ever before.

The time has come to treat compute resources, various parts of the datacenter and the entire world of infrastructure as commodities. The world requires price certainty as new technologies disrupt the status quo, UCX is prepared to deliver the world what it needs, real capital efficiency for IT.

Commentary by Jack Bouroudjian, a three-term director of the Chicago Mercantile Exchange and founder and advisor of UCX (Universal Compute Exchange). Follow him on Twitter @JackBouroudjian.